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BEIJING QUNA INFORMATION TECHNOLOGY CO., LTD. V. GUANGZHOU QUNA INFORMATION TECHNOLOGY CO., LTD. (2013) YGFMSZZ No. 565, Guangdong Higher People’s Court

Cause of action: Dispute alleging unfair competition

Collegial panel members: Yue Lihao | Yu Jie | Shi Jinghan

Keywords: domain name, specific name of famous service, unfair competition

Relevant legal provisions: Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Dispute Cases Regarding Computer Network Domain Names, article 4

Basic facts: On May 9, 2005, Zhuang Chenchao registered the domain name “qunar.com” and established the “qunar” website. After Beijing Quna Information Technology Co., Ltd. (hereinafter “Beijing Quna Company”) was incorporated and registered with the Industry and Commerce Authority on March 17, 2006, the domain name “qunar.com” was transferred by Zhuang Chenchao (Beijing Quna Company’s legal representative) to Beijing Quna Company. After years of use, service logos such as 去哪儿 (pronounced qunar, meaning “where to go”), 去哪儿网 (pronounced qunar wang, meaning “where to go website”) and “qunar.com” became the specific names of a famous service.

Guangzhou Quna Information Technology Co., Ltd. (hereinafter “Guangzhou Quna Company”) was formerly known as Guangzhou Longyou Xianzong Travel Agency Co., Ltd., which was founded on December 10, 2003, and covered a scope of business similar to that of Beijing Quna Company. On June 6, 2003, the domain name “quna.com” was registered. After several transfers, it was acquired by Yuan Jingen (Guangzhou Quna Company’s legal representative) on May 9, 2009. On May 26, 2009, the renaming of Guangzhou Quna Company was approved and the domain name “quna.com” was transferred to it soon afterwards. Guangzhou Quna Company subsequently registered domain names “123quna.com” and “mquna.com”, and used 去哪 (pronounced quna, meaning “where to go”), 去哪儿 (pronounced qunar, meaning “where to go”), 去哪网 (pronounced quna wang, meaning “where to go website”) and “quna.com” in its external publicity materials and operations.

On April 25, 2011, Beijing Quna Company filed a lawsuit in the court of first instance against Guangzhou Quna Company, alleging that its use of “quna”, “qunar”, “quna wang” and “quna.com” in its external publicity materials and operations constituted unfair competition, and asking the court to order Guangzhou Quna Company to immediately cease its unfair competition and pay damages of RMB3 million to Beijing Quna Company for its economic losses.

Held: Guangzhou Intermediate People’s Court delivered its judgment ((2011) SZFMSCZ No. 217) on June 9, 2013, holding that both Beijing Quna Company and Guangzhou Quna Company provided online travel services and there existed competition between them. The commercial marks “qunar”, “qunar wang” and “qunar.com” used by Beijing Quna Company were the specific names of a famous service. Guangzhou Quna Company’s use of the commercial marks “quna”, “qunar”, “quna wang” and “quna.com” constituted an infringement of Beijing Quna Company’s right to those names, and Guangzhou Quna Company’s use of the word “quna” in its company name constituted unfair competition. Guangzhou Quna Company’s use of the domain names “quna.com”, “123quna.com” and “mquna.com” constituted an infringement of Beijing Quna Company’s interests in the domain name. The court therefore:

(a) ordered Guangzhou Quna Company to cease using “quna” as its company name;

(b) ordered Guangzhou Quna Company to cease using “quna”, “qunar”, “quna wang” and “quna.com” as its service marks;

(c) ordered Guangzhou Quna Company to cease using the domain names “quna.com”, “123quna.com” and “mquna.com”, and to transfer these domain names to Beijing Quna Company within the stipulated time limit;

(d) ordered Guangzhou Quna Company to pay RMB350,000 to Beijing Quna Company to compensate it for its economic losses; and

(e) dismissed all other claims of Beijing Quna Company.

Dissatisfied with the judgment, Guangzhou Quna Company appealed to the Guangdong Higher People’s Court, arguing that its domain name “quna.com” was legitimately registered on June 6, 2003, and was thus an existing prior right. Furthermore, it argued that it had no malicious intent in acquiring the domain name “quna.com” and subsequently registering the domain names “123quna.com” and “mquna.com”.

The second-instance court delivered its judgment on March 19, 2014, holding that “qunar”, “qunar wang” and “qunar.com”, as used by Beijing Quna Company, constituted specific names of a famous service, and that Guangzhou Quna Company’s use of the word “quna” as its company name constituted unfair competition. However, it found Guangzhou Quna Company’s use of domain names “quna.com”, “123quna.com” and “mquna.com” to be the exercise of existing prior rights, which had a legal basis. The court of second instance therefore:

(a) affirmed the first-instance decision that Guangzhou Quna Company be ordered to cease using “quna” in its company name and using marks such as “quna”;

(b) set aside the first-instance decision that Guangzhou Quna Company cease using the domain names “quna.com”, “123quna.com” and “mquna.com” and the order that it transfer these domain names to Beijing Quna Company within the stipulated time limit; and

(c) reduced the amount of compensation to RMB250,000 accordingly.

Reasoning: At second instance, the dispute focused on whether the use of domain names “quna.com”, “123quna.com” and “mquna.com” by Guangzhou Quna Company had a legal basis.

According to article 4 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Civil Dispute Cases Regarding Computer Network Domain Names: In the trial of domain name dispute cases, the people’s court shall find the respondent’s registration and use of a domain name to be an infringement or unfair competition when the following conditions are satisfied:

1) the civil rights and interests claimed by the plaintiff for protection are legitimate and valid;

2) the defendant’s domain name or its main part constitutes the reproduction, imitation, translation or transliteration of the plaintiff’s well-known trademark, or is same as or similar to the plaintiff’s registered trademark and domain name, etc., enough to cause confusion among the relevant public;

 3) the defendant has neither rights and interests in the domain name or its main part, nor justifiable cause to register or use such domain name;

4) the defendant registers or uses the domain name with a malicious intent.

The key to determining whether Guangzhou Quna Company had engaged in unfair competition was whether its use of the domain names satisfied all of these four elements.

(a) On the use of the domain name “quna.com”, the court of second instance opined that Guangzhou Quna Company enjoyed legitimate rights and interests in the domain name “quna.com”, and had justifiable cause to use it; failing this third requirement, Guangzhou Quna Company’s action did not constitute unfair competition. The reason was as follows.

(i) On June 6, 2003, the domain name “quna.com” was registered for the first time, but it was not until May 9, 2005, some two years after the initial registration of “quna.com”, that the domain name “qunar.com” was registered and the website created. The registration of “quna.com” was therefore legitimate. After several transfers, Yuan Jingen (Guangzhou Quna Company’s legal representative) acquired the domain name “quna.com” on May 9, 2009, and Guangzhou Quna Company later acquired it on July 3, 2009. Such transfers did not break the law and hence the law should not interfere with Guangzhou Quna Company’s use of its legally acquired domain name “quna.com”.

 (ii) On August 27, 2010, Beijing Quna Company submitted to the Beijing Secretariat of the Asian Domain Name Dispute Resolution Center a letter of complaint against Guangzhou Quna Company’s use of the domain name “quna.com”, requesting that this domain name be transferred to Beijing Quna Company. According to the expert panel, the complainant could not satisfy the three conditions stipulated in the Uniform Domain Name Dispute Resolution Policy and hence there was no reason to grant its request to “order the respondent to transfer the disputed domain name to the complainant”. This further proved that Guangzhou Quna Company had justifiable cause to use the domain name “quna.com”.

(iii) Because domain names are limited in length and quantity, similar domain names are registerable. The only difference between Beijing Quna Company’s domain name “qunar.com” and Guangzhou Quna Company’s domain name “quna.com” was the dropped letter “r”. Although the two domain names are similar, the two parties are obliged to tolerate the possible confusion between these two domain names in their use. If the confusion created by the use of the two domain names were to be used as a basis to argue that Guangzhou Quna Company used the domain name “quna.com” out of malicious intent, and to further infer that Guangzhou Quna Company’s acquisition of the domain name “quna.com” had no justifiable cause and hence constituted unfair competition, such logic would not hold water.

(b) On the use of the domain names “123quna.com” and “mquna.com”, these are more similar to the domain name “quna.com” used by Guangzhou Quna Company than to Beijing Quna Company’s domain name “qunar.com”. Because Guangzhou Quna Company had justifiable cause to use the domain name “quna.com”, the domain names “123quna.com” and “mquna.com” registered afterwards should also be allowed to be registered and used. In conclusion, there were valid reasons for Guangzhou Quna Company to argue that it had a legal basis to use the domain names “quna.com”, “123quna.com” and “mquna.com”. The court of second instance supported its appeal according to law.

As also noted by the court of second instance, both parties in this case enjoyed rights and interests in domain names with legitimate sources, and therefore they were ordered to tolerate, respect and coexist with each other over the long term. Neither party was permitted to deprive the other of its living space on the basis that its own popularity has increased nor was one party to maliciously exploit the higher goodwill of the more well-known party to achieve improper business advantages. Guangzhou Quna Company should therefore have the right to continuously use the domain names “quna.com”, “123quna.com” and “mquna.com”, but be obligated to add corresponding distinguishing marks on the domainname- related search links and websites so that consumers can distinguish between these and “qunar”, “qunar wang” and “qunar.com”, which are the specific names of Beijing Quna Company’s famous service.